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“UNITED STATES POLICY TOWARD SAUDI ARABIA” mentioning the U.S. Dept of State was published in the Extensions of Remarks section on pages E908-E910 on May 2, 1995.
The publication is reproduced in full below:
UNITED STATES POLICY TOWARD SAUDI ARABIA
______
HON. LEE H. HAMILTON
of indiana
in the house of representatives
Tuesday, May 2, 1995
Mr. HAMILTON. Mr. Speaker, for many years Saudi Arabia has been a key partner of the united States in the strategic gulf region. Saudi Arabia is a major oil supplier and trading partner of the United States, and it played an essential role as our coalition ally in the gulf war. Since that war, however, there have been a number of credible reports that the Saudi economy is in difficulty, whether as a result of low oil prices and the cost of supporting the gulf war or as a result of mismanagement. There are also questions about the Kingdom's handling of domestic political discontent, its human rights record and its treatment of some U.S. citizens. I wrote to the Secretary of State on January 23, 1995, and on March 28, 1995, I received a reply on these issues.
Given the tremendous importance of Saudi Arabia to United States interests, I request that my exchange of letters on Saudi Arabia with the Department of State be entered into the Congressional Record:
House of Representatives, Committee on International
Relations,
Washington, DC, January 23, 1995.Hon. Warren Christopher,Secretary of State,U.S. Department of State, Washington, DC.
Dear Mr. Secretary: I write to seek clarification of U.S. policy toward Saudi Arabia.
First, it appears to me that Saudi Arabia is not responding effectively to the economic and political challenges it now faces, and I am concerned that U.S. policies may be contributing to Saudi economic difficulties.
Second, I am concerned about whether the U.S. government has a full appreciation of the internal political dynamics of Saudi Arabia and about whether we are in a position to respond effectively to internal events.
Third, I am concerned that important U.S. values, such as respect for the human rights of all Saudi citizens and fair treatment of American citizens abroad, are not advanced as effectively as they should be in our relations with Saudi Arabia.
I would appreciate your responses to the following questions.
1. Do you see low oil prices and the costs of financing the Gulf War as the cause of Saudi Arabia's current economic difficulties?
Are these problems compounded by domestic economic mismanagement, including a failure to institute taxes or cut subsidies?
How do you assess reports of corruption and kickbacks as a source of economic mismanagement and popular discontent?
How do you assess King Fahd's efforts of the past year to cut spending and address Saudi Arabia's economic problems?
2. How would you describe the stake of the United States in the Saudi economy?
Have U.S. efforts to boost sales of advanced weaponry and commercial aircraft to Saudi Arabia contributed to the economic dilemmas the Saudis now face?
Does the burden of payments for these purchases contribute to anti-American sentiment in the Saudi military and government?
3. What is current U.S. policy on arms sales to Saudi Arabia, and the status of U.S. efforts to restructure Saudi payments for previous military purchases?
What is the status of the $6 billion Saudi contract with Boeing and McDonnell-Douglas for the purchase of civilian airliners?
4. What is the policy of the U.S. embassy in Riyadh with respect to routine political contacts with a broad range of Saudi citizens, and to reporting on the internal situation in that country?
What limitations, unwritten or written, govern the contacts and reporting of U.S. embassy officers in Saudi Arabia?
[[Page E909]] Are similar limitations imposed on U.S. diplomats anywhere else?
What do you see as the strength of the Saudi political opposition, as well as the effectiveness of Saudi authorities in suppressing dissent?
Do you believe that the long-run political stability of Saudi Arabia is advanced by the government's suppression of any form of dissent and any free exchange of political ideas?
5. I recognize and appreciate the importance of Saudi Arabia as a strategic partner in the Gulf region, and the differences in our political cultures. Yet it is a matter of concern that we often appear unwilling to assert our own interests when we disagree with Saudi actions or policies.
Are press reports correct that the State Department spokesperson backed away from a statement last fall that the U.S. has ``serious concerns'' about the human rights situation in Saudi Arabia, even when those concerns are documented in the annual State Department human rights report?
What is the U.S. doing to promote respect for the basic human rights of Saudi citizens, especially the rights of peaceful assembly and free expression?
Does the U.S. Embassy press for fair treatment of all Americans working or living in Saudi Arabia?
Specifically, are you concerned by reports of the mistreatment of American women by Saudi religious police; the alleged detention, mistreatment, and expulsion of American citizens involved in business disputes with Saudi nationals; and reports of a forced separation of a U.S. citizen child from his mother as a result of the political activities of the child's Saudi father?
What steps do you take when U.S. consular concerns are not addressed?
I look forward to your early reply.
With best regards,
Sincerely,
Lee H. Hamilton,Ranking Democratic Member.
____
U.S. Department of State,
Washington, DC.Hon. Lee Hamilton,Committee on International Relations, House of
Representatives.
Dear Mr. Hamilton: Thank you for your recent letter to the Secretary, and for the opportunity it provides to review with you the nature of the U.S.-Saudi relationship and our perspective on developments in Saudi Arabia. The Secretary has asked that I respond on his behalf.
For fifty years, Saudi Arabia has been a key partner for the U.S. in support of critical regional and global objectives, including security of global energy supplies, Middle East peace, and stability in the Gulf. As part of our dialogue, we have encouraged Saudi Arabia to support broad initiatives, like indefinite extension of the NPT, which contribute directly to enhanced regional security. For our part, the U.S. has worked closely with the Government of Saudi Arabia in support of its security and economic development. We fully expect to continue this close bilateral cooperation into the future.
In recent years, Saudi Arabia's economic development was slowed by the double impact of the Gulf war and the sharp decline in the world market price of oil. Despite the popular impression of Saudi Arabia as a country of unequalled wealth, the Saudi economy is, by global standards, relatively modest. Thus, its heavy outlays in 1990-91 as a result of Iraq's occupation of Kuwait--which the Saudi government estimates at some $60 billion--clearly burdened the economy. Until that time, the Saudis had begun to control the budget deficits which they had confronted since the mid-1980s as a result of declining oil revenues.
Despite the recent setbacks which the Saudi government has encountered, we believe that it has been a prudent and responsible manager of the Saudi economy. During the 1970s and early 1980s, the Saudi government was able to cover its investments in infrastructure and economic development, finance the extensive social safety net which it developed at that time, and build its external reserves through revenues derived from the sale of oil. (In a 1993 letter to The New York Times, Saudi Finance Minister Abalkhail valued Saudi infrastructure investments, including soft loans to private sector investors,
at nearly one trillion dollars.) At the same time, as external reserves have declined, an aging infrastructure and a rapidly-growing population demanding services are now challenging the government for major new capital investments.
The government has embarked on a two-prong approach to meet this challenge. For the second year in a row, the King has announced significant decreases in government spending which will bring total budget reductions over the two-year period to twenty-five percent. The King also announced this year substantial reductions in popular subsidies, including those on gasoline, electricity, and water. These two moves should, by the Saudi government's estimate, reduce its deficit in SFY 95 to approximately $4 billion, down from the double-digit deficits experienced in recent years. More importantly, the moves should stimulate the private-sector-led growth upon which continued prosperity depends. We have encouraged the Saudi government to pursue deeper economic reforms, including restructuring of its inefficient public sector.
In the short term, however, government cutbacks and reductions in services have clearly affected the majority of Saudis. Tighter government budgets have reduce employment opportunities for young Saudis, frozen wages, and slowed the private sector, which has been heavily dependent on government contracts for its prosperity. This short-term economic downturn has colored popular perceptions of the government's financial management and sharpened the distinctions among the social groups. These economic strains have added to resentment over the advantages enjoyed by the very large Saudi royal family, particularly allegations that family members have traded on their positions and otherwise profited unethically in the society. While it is unclear what impact the activities of the Saudi royal family probably have on the Saudi economy, they will likely continue to engender resentment as long as the benefits of the society appear to be distributed unfairly.
The United States, of course, has an enormous stake in Saudi stability and economic development. Saudi Arabia is the largest trading partner of the U.S. in the Middle East and our fifteenth largest trading partner in the world. Saudi purchases of U.S. manufactured goods have played an important role in sustaining important sectors of the U.S. economy, such as airframes and the defense industrial base. Close cooperation between the U.S. and the Saudi Embassy here has paid off in our success in resolving nearly all of the longstanding commercial disputes which had complicated our strong economic relationship. Saudi adherence last year to the New York Convention on the arbitration of commercial disputes should prevent a repetition of these disputes in the future.
Although U.S. companies, with support from the U.S. government, have competed aggressively for Saudi sales, it is the Saudis alone who have defined their import priorities. Thus, it is misleading to suggest that U.S. companies are responsible for Saudi economic problems because they have won international competitions decided by the Saudis to provide major military and civilian items. Indeed, we believe that U.S. companies, as world leaders in both price and quality, have contributed to sound Saudi fiscal management by providing superior products at the lowest prices. Nevertheless, we are aware that the high profile of some U.S. commercial successes has generated criticism of the U.S. in sectors of Saudi society which believe incorrectly that the U.S. has pressed the Saudi government to make unwanted or unneeded purchases.
One major category of U.S. exports to Saudi Arabia has been in defense goods and services. This relationship reflects decades of close U.S.-Saudi security cooperation, including the major role that the U.S. military has played in working with and advising the Saudi military on its development. Saddam Hussein's occupation of Kuwait triggered a reevaluation in Saudi Arabia of the country's defense requirements and led to the decision to expand and modernize the Saudi armed forces significantly.
Purchases of U.S.-made equipment and services expanded substantially in the early 1990s but payments in recent years have been hampered by Saudi cash flow problems. U.S. officials have worked closely with their Saudi counterparts in the Ministry of Defense and Aviation since 1993 to restructure the Saudi program in order to reduce annual payments without cancelling procurement programs or diminishing operational readiness. Discussions for managing the SFY'95 program continue. Until such time as these issues are resolved, and Saudi ability to sustain current programs is sound, we and the Saudis have agreed that prudent financial management dictates that there not be purchases of major new military systems. We expect that any sales this year will be limited to support of ongoing programs. Payment levels for U.S. equipment will decline substantially beginning next year.
Negotiations to conclude the contracts for the purchase of Boeing and McDonnell Douglas airframes have been ongoing since the announcement of Saudi intentions. Those discussions are continuing. Administration support for the two U.S. companies remains very strong and we are in regular contact with company officials here and in Riyadh to coordinate our efforts to finalize the sale.
The U.S. Mission in Saudi Arabia maintains contact with a broad range of Saudis, both officials and private citizens. There are no limits on such contacts. On the basis of these,
it is our view that the large majority of Saudis supports the leadership of the Al Saud. Even among those who are critical of elements of their leadership, we are not aware of significant sentiment in favor of changing the nature of the Saudi government or its leaders. The Committee for the Defense of Legitimate Rights (CDLR) is based in London although they keep in regular contact with the U.S. government through phone, and fax, and mail.
As a matter of principle, the U.S. government believes that societies are strengthened and are more stable if they are broad-based and permit popular participation in decision-making. This would include freedom of expression and peaceful assembly. We have encouraged the Government of Saudi Arabia to take steps toward democratization and we have welcomed its efforts, like the inauguration of the Majlis al-Shura, which might advance those objectives.
Despite some gains, there has been no effort to conceal the fact that the U.S. has serious concerns about the human rights situation in Saudi Arabia. As your letter notes,
[[Page E910]] the State Department's annual report on human rights contains extensive discussion of these issues in Saudi Arabia and catalogs U.S. concerns, which include issues involving the rights of women and religious minorities as well as incidents of arbitrary arrest and mistreatment at the hands of the authorities.
Protection of the rights of U.S. citizens abroad is a matter of international dimensions with some aspects, like child custody cases, occupying particularly the attention of the Department and our posts overseas. In Saudi Arabia, we take any allegation of mistreatment of U.S. citizens seriously and investigate it thoroughly. As needed, we have aggressively raised these allegations to the highest levels of the Saudi government. Saudi authorities are committed to administer their society in accordance with their traditions, religion, and legal framework. This has on occasion led to differences between the U.S. and Saudi Arabia, particularly in regard to matters affecting dual nationals living and working in Saudi Arabia. But we believe that the U.S. Mission has been extremely effective in its role of providing American citizen services. Overall, the number of problems involving the tens of thousands of Americans who live and work in, or visit, Saudi Arabia each year has been few.
I hope you find this information helpful. If you would like to discuss these issues at greater length, we would be happy to arrange for appropriate officials to meet with you at your convenience.
Sincerely,
Wendy R. Sherman,
Assistant Secretary,
Legislative Affairs.
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